The PCAOB Standard Corresponding to an Independent Auditor's Report When

question 67

Multiple Choice

The PCAOB standard corresponding to an independent auditor's report when work of a component auditor is used is ________.

• A)AS 1205 Part of the Work Performed by Other Independent Auditors
• B)AS 2110 Identifying and Assessing the Risks of Material Misstatement
• C)AS 2605 Consideration of the Internal Audit Function
• D)AS 1210 Using the Work of a Specialist

---

Definitions:

Step-fixed Costs

Costs that remain fixed over a range of activity, but jump to a higher level of expense at certain points when activity levels require it.

Variable Cost

Costs that vary directly with the level of production output or business activity, such as materials and labor directly involved in producing a product.

Inflationary Price Increase

A rise in prices across an economy, often due to an increase in the money supply or demand outstripping supply, reducing the purchasing power of money.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.